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Tuesday, May 4, 2010

What Can You Do

I do not think a lot of people are aware of what is really going on with the economy right now. They do not want to hear any more about the economy. They do not want to watch the news talk about the economy. But, the truth of the matter is, regardless of all the speeches, talks and news broadcasts, not one person is telling you: what really is going on; why it is going on; and what you can do to stop it. I have already gone over in my economic blog what were some of the reason of this economic depression. What I would like to discuss today is what you can do personally to take control of your financial destiny, AND in so doing it, help your fellow citizen take control of his financial destiny by proxy.

You might be wondering, why you would be influenced to help your fellow citizen take control of his financial destiny. The answer is simple. By doing what I am about to reveal to you, you are helping yourself. If just 30% of the population helps themselves, this economic depression will be over.

That sounds rosey and merry does it not? But, what I am about to reveal is going to take America through some very hard times and the medicine will be painful. But, let me assure you that, the reason it will be painful, is because the system we have set up now is fraudulent. What I will reveal will result in probably hundreds of thousands of people losing their jobs. You might ask, "how can that be a good thing?" The problem is, they should not have been hired in the first place.

Let me give you a real world example.

A vast majority of Americans used to work in factories for some time. While most would think, on the GRAND scale, that factory jobs are low paying, the fact is that factory work does not require an advanced degree. So, you had quite a large segment of the population making far more money, with only adult level education, than they would in any other segment of industry or business. Because of this the American lifestyle changed drastically. Most people were able to afford what only the rich could afford before. And, with cheaper production methods, whole segments of consumer goods were made available to people that could never dream of owning them before. It was never the same quality as it was when the goods were limited to those that could afford them, but they looked just like them.

With this heightened lifestyle, the American living habits changed. Instead of living off the land and cooking for themselves and eating at home19 out of 20 nights, they began to eat out more and more. This created the fast food industry.

Finally the captains of industry but the wagon before the horse. In order to chase the dollar of the general public, they started cutting corners to make production cheaper. In this pursuit, they finally removed labor altogether as the ultimate means to cut expenses. They did this by automation and / or outsourcing to lower income nations.

[giving them the benefit of the doubt and not assuming this was on purpose to strip the country of its wealth] They cut out the very workers that were their largest clientele. They had undone, what was their bread an butter before. However, the jobs that were lost in manufacturing now switched over into the service industry, including the same fast food industry which saw a big boom when workers were paid more and had leisure money.

Due to not taking a look at their finances and not noticing they could no longer afford it, and being creatures of habit and bending to peer pressure, most Americans continued to buy consumer goods as they had just learned to do. They continued to eat out, making it now a normality to eat out, and an unusual occasion to cook at home. Now it switched to eating at home 6 out of 20 nights. More and more of the population sought jobs and were hired into the very service industry they had helped create to service them, due to their former lifestyle.

That is a real world example of what happened in America. In a very short time, Americans forgot that the items they now bought were once luxury items that only the well to do and rich could afford: television; cars; eating out. Instead of going back to their previous lifestyle when their money was less, they continued to purchase these luxury items. They had been brainwashed into thinking that they were not, in fact, luxury items, but every day items needed for living.

The manufacturers of course did not care that they had done away with a lifestyle that could have continued on growing and growing, but they turned around and egged people on to continue purchasing luxury items. They removed all notion of what luxury was and what normalcy was.

Fast forward to more recent times.

One of the luxuries that became common place were homes. Some of you might be shocked at such a notion. But, let me tear the wool blanket from over your eyes.

Homes were never and will never be a consumer good. From the beginning of the modern homestead, homes have always depreciated in value. This is what realtors, brokers and the government wants you to forget. Why is there a tax write off for buying a home? Because of the depreciation of the home. As soon as you buy land, break it up and plop houses on it, the value goes down. Yes you might be able to sell them for more with brand new houses on it, but from that moment on the value depreciates. Because, the land could have been used for an entirely different project. Also a home depreciates anyway due to its age, maintenance costs and general upkeep.

Realtors, brokers and the government rely on the general population NOT doing their homework and going through the math to figure out the real cost of a home and how much a home depreciates. Let's say you purchase a home and you think you will live in it and then sell it when you get ready for retirement. Let's say the original purchase price is merely $300,000.00 and you think you will sell it for a cool $1 million when you get ready in 30 years. Do you think you would have made some money? Look at the chart below.

As you can see in the chart, even if you sold the house for $1 million you would be actually losing money. But, wait, I have even worse news for you.

The chart doesn't account for taxes going up. The chart doesn't account for the inflation of the dollar over 30 years. So even if you sold your home for $1 million in 30 years, due to inflation it would be worth $2 million after you account for inflation. So you are double, no triple, no quadruple screwed. None of this is even accounted for in the chart.

Inflation is the single most theft of wealth in the whole nation. Who has control of inflation?

Banks! Namely, the federal reserve.

So what can you do about this mess were in?

take your head out of the sand, sit down to your kitchen table, grab your wife, husband and kids and everyone grab a calculator, pencil, erasers and paper

figure out the real cost of how you live from day to day, week to week, month to month

you are going to adding the cost of inflation to all your calculations, including your paycheck

remove any and all money you have from big banks

buy a house safe and put the money in the safe and only you should know it, not even your kids should know it

keep 10 months worth of cash in there at a minimum, remember to account for inflation

if you must keep money in a bank, put it in a local credit union, and you just CAN'T find one, put it in a LOCAL bank

if your local bank gets bought out by a large bank, remove your cash and find another credit union or local bank

pay off all loans in full, as soon as you possibly can, remember you are calculating everything with inflation

rip up, cut up any and all credit cards [credit is a financial farce and a hoax played on the American population]

You are to pay for everything in cash. If you do nothing else out of the list, because you're too stupid to breath, at least pay for everything in cash, in full. This practice alone will save you thousands of dollars.

Remember what NOT paying in cash gets you:

bank fees

over draft fees

taxes on items you pay in installments

inflation raises the cost of an item you pay in installments

interest rates on items you purchase, even minor inexpensive items

Paying in cash would remove 30% of your financial worries.

If 30% of America followed the list of 10 things we would be out of this financial crisis this year. I guarantee it. I put my first-born's life on that.

Let me leave you with this. I've said this before in one of my reports here. The value of houses circa 2008 were dramatically INFLATED. It was a scam to make money and keep making money. Home values should not have been anywhere near where they were. Homes were selling for $100,000 that were worth maybe $35,000. Homes that were selling for $1 million were worth $300,000. And, after looking into they found that everyone was in on it. Noone thought of it as wrong because it seems innocent to say a home is worth a certain amount. The more a home is worth, the more houses will sell in general; inspectors will have more work; more construction; brokers can pawn off loans to big banks; big banks can package and sell the loans as financial instruments to investors who either do not care or who are too stupid to handle their money anyway.

When they say there was fraud, don't point the finger at the buyer without point the finger at everyone from the house appraiser all the way up to the president of the United States. And, make sure you go all the way back to Clinton, not just Bush, and Obama is just as lying as they are.

About Me

I'm a 3rd year Law School student. I have taken off from law school to find myself. I used to work for the U.S. government in the department of state. I speak several languages and have lived abroad most of my life.